Gold Trading Price – What Is Driving It And Is There An Alternative To Buying Gold?

It may not be very exciting but silver and gold trading prices have gone up consistently and to somewhere which you think may be too high. If you look at last year, you will be able to see the substantial gains. What is driving the gold trading price to such high levels and what is the alternative to buying gold, which is expensive at the current price?

Gold trading price has just went over $1,400 an ounce and silver trading price is over $29 an ounce. When you compare where it used to be (with gold as low as $250 and silver as low as $8 or $9), it is rather spectacular returns.

The markets think that there is a good chance that the financial recovery can gain traction and everything will go well and that explains the long period of consolidation. Then when the news showed huge amount of fear and uncertainty, the worries on the U.S. stimulation and the world’s foreign exchanges came back. But there are more than that is happening in the gold trading market. It is a combination of all these factors that has driven the price of gold to the current levels.

When the gold price is consolidating between $1,050 and $1,250, many people believe gold price may retreat from record highs as the jewelry sector and retail demand out of India. Then the high prices came to be accepted as prices failed to retreat. Jewelry demand has started to return steadily. We expect it to remain as it is or improve at these high levels, unless there is a very large jump upwards in the gold price.

So will price of gold trading highs or lows from now onwards?

The analyst and commentators in the market are focusing on whether price of gold will rise or fall right now. This is being the reason that developed world markets are focused on making money. Likewise, from the technical point of view, the chart of gold price is important to investors as they are looking to make profits from the market. However, they are not the major force in the gold market any more.

For the first time in so many Asian people’s lives, they now have a good amount of disposable income. As people who know the downside of life only too well they have a propensity to save, almost naturally. Up to 40% of the disposable income they have goes into bank deposits or into gold. As China grows, a larger and larger number of people enter the gold market for the first time. These buyers simply want to save in gold.

Even though there is lots of talk about gold and bullish on gold, you have to remember there are other ways besides buying gold. In the first place, gold may be quite expensive for most middle-class investors. They can’t afford to buy even one ounce of gold, let alone several. It’s just too expensive.

An alternative but riskier way to invest in gold is to look at gold prospects generator companies. These companies usually do the early field work in identifying prospects of drilling for gold, silver or even copper. Once a good prospect site is identified, they farm out these projects to willing partners but retain some equity stacks of the project.

In this way, these prospects generator companies are able to retain good potential upside for investors while at little capital outlay. If you want to invest in such companies, don’t place all your bets on one company but rather invest in a few of these companies.

Top 10 Essential Tips For Successful Gold Market Analysis

Gold is becoming one of the most interesting investments that one can make. Gold establishes assurance for the future because of its great ability to preserve a portion of your savings invested in it should difficult economic times come. Gold is one of the more eye-catching investments in the precious metals category and is becoming more and more popular because it provides diversification in any investment portfolio. Whether you are considering purchasing bullion coins, gold-stock or another type of gold, market analysis is essential in order for you to know whether you have a sound gold investment. Here are ten essential tips for successful gold market analysis.

  1. Examine the daily market report – in spite of the fact that gold is one of the more stable precious metals, taking a look at the market report daily allows for exceptional monitoring of your money. This also allows you to more closely study the changes in the market to know whether you need to get out of your gold investment or not.
  2. Know the trends – every security has trends that they work in. Speak with other investors about these trends so you can capitalize on a profitable gold return and minimize risk. Trends are important as they keep any investor abreast of what is occurring within the gold market.
  3. Prices – there are many different gold investing companies that provide gold market analysis on their websites so you are better informed.
  4. Stay within 5-10% of your entire investment funds – should you invest more, you are potentially risking losing a portion of your investment. Gold just like any investment can go down in price, diversifying your investment risks allows you to invest wiser.
  5. Get your edge – with precious metal investments, the strategy is one of the most important aspects. Knowing how you will invest helps you to maintain a steady investment while keeping within the lines of what you hope to achieve with that particular investment.
  6. Bear or Bull – there are variety of opinions on these two types of markets with regard to gold analysis. This particular tip depends on your focus and your overall objective with regard to gold in your portfolio.
  7. Watch the Mines – Mining companies tend to be the most volatile of all gold investing. Gold market analysis is the most successful when you are tending to this particular type of investment (if you have it).
  8. Historical trends – knowing historical trends is imperative to successful gold market analysis. These trends are good predictors as to how gold will perform going forward.
  9. Technical Analysis – charts and graphs often provide an even more decisive technique to gold market analysis. Using these can help you be successful in the gold market.
  10. Foreign markets – knowing the foreign markets is most likely the best tip among this list. Many developing countries are constantly researching the changes and updates surrounding gold. By constantly researching, this helps for a better and sounder investing strategy and keeps the gold market analysis strong and steady.

Gold Bullion Bars Value Vs Coins

The question is often asked: what kind of gold investment should one make? It depends on a variety of factors. Gold is considered a worthwhile investment. When considering purchasing this precious metal one should inspect and compare the prices as they are wide-ranging and expansive.

There are numerous ways to invest in gold. You can purchase gold bullion, which comes in many forms including bars and coins; gold exchange funds, more commonly known as ETFs; ETNS, which are monetary investment notes that offer the possibility of risk often associated with any kind of investment yet provide a solid return based on the performance of gold; and mining stocks, which allow you to invest in the gold market, yet not bullion market. Gold bars and coins are the most popular choices. They add diversification to any portfolio whether the investor is conservative in their investing or aggressive. Are there differences between bars and coins? Yes, but it is truly a matter of preference, more than anything. Here are a few notable differences, however.

Bars:

  • Considered the best option for investors.
  • Bars have a lower premium over market price. Larger bars have a lower premium, while small gold bullion bars may cost more.
  • When selling gold bullion bars, the raw value of the gold is what is considered.
  • Range from a few grams to over 3 kilograms.
  • Have strict rules that apply to them to ensure the vitality of the gold bullion bar itself.
  • Gold bars can be easily scratched.
  • Cast gold bars are made by pouring the metal into a mold, while minted gold bullion bars are created from a sheet of gold metal.
  • More efficient than coins in some applications.
  • When selling, you typically have to find a large dealer, as many people are not familiar with gold, let alone gold bullion bars.
  • The process to liquidate a gold bar can be cumbersome and costly.

Coins:

  • Easier to sell.
  • Come in different types and styles such as the Gold American Buffalo, British Sovereign and American Gold Eagle.
  • Have a smaller risk of counterfeiting and forgeries.
  • The value of the gold in the coin will increase over time.
  • Gold coins are usually geared towards the collector.
  • Collectible coins carry more of a premium than regular gold bullion coins.
  • Relatively straight forward purchase over other forms of gold as they are easier to sell.
  • Portable.

We cannot definitely recommend one over the other type of investment because investment goals differ and what’s right for one individual might not be appropriate for another. If you can afford it, acquire a variety of gold bullion bars and coins for your investment portfolio to match different goals.